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2005 Hopkins and Company, LLC
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Strengths
There’s sound advice from many experts
to executives in the phrase, “play to your strengths.” We believe strongly
that executives need to be themselves, understand their strengths, deploy
those strengths and be sure that someone else on the executive team covers
them in areas of weakness. Unfortunately, for some executives, their
strengths overpower team dynamics, and weak areas are overlooked, and that
can lead to organizational and personal trouble. The stories we’ve selected
for your reflection this month all call attention to strong leaders with
specific strengths, and the challenges of moving forward with those strengths
maintained, and weaknesses shored up by others. As you read these stories,
think about who you are and what your strengths are.
Does your organization utilize those strengths effectively? Do you utilize
the strengths of those who report to you? Beyond the areas where you and
others are strong, who covers your weaknesses, and how do you ensure that you
and your organization are protected?
Fifteen new
books are rated in this issue, beginning on page 5. Two books are highly
recommended with four-star ratings; eight books are recommended with three
stars; four are mildly recommended with two stars; and one has a cautious
one-star rating. You can also visit our complete 2005 bookshelf at http://www.hopkinsandcompany.com/2005books.html
and see the rating table explained as well as explore links to all books
we’re reading or considering this year. Thirty seven new books have been
added to the “shelf of possibility,” which now has over 150 books in queue.
If there’s something missing from the bookshelf that you think we should be
considering, or if there’s a book lingering on the “shelf of possibility”
that you think we should read and review, let us know at books@hopkinsandcompany.com.
Articulitis
The herd in
the business press has been piling on Hewlett-Packard
CEO Carly Fiorina in
recent weeks. Details of a board-driven corporate reorganization were
revealed by The Wall Street Journal
on January 24 (http://online.wsj.com/article/0,,SB110652096353733547,00.html):
“Under the reorganization plan discussed by the board at San Francisco's Park Hyatt Hotel, three H-P
executives would gain more day-to-day control. … One person close to the
situation said Ms. Fiorina initially had resisted
the moves, but by the end of the session had agreed with directors and was on
good terms with them.” The January 26 Journal
had columnist Jesse Eisinger saying Fiorina
“took the wrong strategy and failed.” (http://online.wsj.com/article/0,,SB110668698388435660,00.html)
The cover article in the February 7 issue of Fortune (http://www.fortune.com/fortune/ceo/articles/0,15114,1019928,00.html)
dissected H-Ps performance under Fiorina and had
her come up short. “First, under the only lens that matters, did the famed
merger that Fiorina engineered between HP and
Compaq produce value for HP's shareholders? Second,
with that merger nearly three years past, is HP in shape to thrive in its
brutally competitive world? The answers are no and doubtful.” We couldn’t
help but wonder if all this negative press relates to a smart, articulate
woman getting coverage that would not be as vitriolic were the H-P CEO male.
A light bulb went off when we read the following in the Fortune cover story: “Fiorina is also
extraordinarily and amazingly articulate in all settings. Most other CEOs
grope at least occasionally for words; she never seems to. Her talent for
talk naturally solidifies her reputation for brains, though it would seem
that one of her staff members recently stretched things a bit by saying, ‘I
wonder what it feels like to walk into a room and know always that you are
the smartest person there.’ But there is also a downside to her verbal skills
in that what she is saying so fluently sometimes wears thin with people,
coming off as short of substance, overly aspirational,
and lacking in spontaneity.” Some of the puzzle pieces began to make sense.
Who would have thought that being articulate can turn into a problem (call it
articulitis)? Despite Fiorina’s
amazing energy level, it will take more than her strengths for H-P to
succeed, especially when that very enthusiasm and energy can be misperceived.
The reorganization expands the roles of three executives with corollary
strengths, so that the whole enterprise has a greater chance to do better, in
the realm that really matters: results not words. Another lesson: even the
greatest strengths can become liabilities in certain situations. (If you want
to check out one aspect of Fiorina’s communication
skills, read her speeches at http://www.hp.com/hpinfo/execteam/speeches/fiorina/index.html).
Have you ever been with someone so smart that you’re not comfortable with
expressing your own thoughts? Have you come across to others as having the
answers because of your intelligence, not necessarily because you really do
have the answer? Does your confidence or assurance cause others not to
question you? What strengths of yours need balancing by other members of your
team? Which of your weaknesses (or strengths carried too far) need to be
covered by another team player? How clear is your communication about these
strengths and weaknesses?
Arcane
The “In the
Lead” column of The Wall Street Journal
can present stories that resonate for executives. The January 18 column (http://online.wsj.com/article/0,,SB110600278522628243,00.html)
described two stories of executives who seem to be succeeding by playing to
their strengths and not trying to re-create themselves.
In one case, “Lawrence Stevenson,
a seasoned retailer who became CEO of auto-parts-retailer and
service-provider Pep Boys in May
2003, says he knew little about the business when he took it over and still
has a lot to do. But instead of trying to master arcane details about brake
pads and radiator hoses, he hired a top merchant, added a new chief
information officer, and focused on building the company's marketing and
merchandising strengths. The stock of Pep Boys has about doubled since Mr.
Stevenson took over. ‘The board's view was that they had a tremendous amount
of industry-specific knowledge about auto parts; what was needed was someone
to challenge the things they were doing and build a strong team,’ says Mr.
Stevenson. ‘I wasn't going to turn the company around on my own, but I could
build a team of senior executives who would have the core skills needed to
supplement the ones that existed here.’” The temptation to learn arcane
details could easily derail a leader who can accomplish more by relying on
experts than by becoming the Chief Expert Officer.
What
details are appropriate for you to learn in your leadership role, and what
constitutes arcane knowledge? How will you know the difference? Do your
direct reports value your answers more than your questions? Should they?
Youth
Forbes selected Amgen as the Company of the Year for 2004 in the January 10 issue
(http://www.forbes.com/free_forbes/2005/0110/128.html).
“‘There's something about a 25-year-old biotech company in California
that's different from a 100-year-old drugmaker in New Jersey,’ says
Amgen's chief executive, Kevin Sharer.
‘We are like a teenager: Our best years are still ahead.’” Prior to Sharer’s
leadership, Amgen acted like an older company, given its tremendous early
success on two drugs, it seemed to be coasting. How has Sharer exploited the
strength of corporate youth since becoming CEO five years ago? According to Forbes, “Since then Sharer has
replaced eight of the ten highest-ranking executives. He spent $11 billion to
acquire Immunex in 2002 (expanding Amgen into a
third market, arthritis) and $1.3 billion last year for Tularik,
a Bay area shop working on drugs for cancer and diabetes. The deals doubled
Amgen's research staff to 4,000, and the firm has worked to sharpen its focus
and lift its output of testable drugs. … ‘We were comfortable, the king of
biotech,’ says Ilana Meskin, an
Amgen manager. ‘Kevin shook us out of our complacency.’ … One of his first
major moves, in early 2001, was to woo George
Morrow, a marketing guru at GlaxoSmithkline who had helped launch the top-selling
migraine drug Imitrex. When Morrow's family balked,
Sharer showed up at their North Carolina
home one Saturday morning armed with local maps and school brochures to sell
them on the move to California.
… He paid bigger bonuses to the best performers instead of handing them out
based on group performance, as Amgen had done.” Time will tell if youth
prevails.
Are the best years for your organization in the past or in the
future? How does your leadership influence the vitality of your organization?
What enthusiasm do you create within your organization? How do you exploit
what makes your organization different from others, especially when
recruiting talent? Would you travel across the country to sell your
organization and your community to the family of a talented potential hire?
Sabremetrics
Executives pick their
fights, and close competitive gaps in ways that capitalize on the strengths
of their companies. One example in the Business
Week special report of the “Best and Worst Managers of the Year” (January
10) (http://www.businessweek.com/magazine/content/05_02/b3915618.htm)
is John Henry, one of the owners
of the Boston Red Sox, who, in
case your were visiting another galaxy in recent months, achieved their first
World Series victory since 1918. “Henry, 55, set the stage for victory by
aggressively boosting revenues after he and his partners … bought the Red Sox
for a record $690 million in early 2002. They made the most of Fenway
Park, the oldest
stadium in Major League Baseball, by squeezing in more seats and then
charging the highest prices for home games, all of which sold out. At the
same time, they started broadcasting home games in high definition on their
80%-owned cable sports network, New England Sports Network -- helping it
routinely win in regional prime-time ratings. All of this turned the Sox into
baseball's second-most-lucrative franchise and gave it the financial muscle
to take on the Yankees, who opened the season with a record $184 million
payroll. The Sox were second, at $127 million. Henry -- a numbers genius,
whose proprietary futures-trading system consistently produces double-digit
returns -- closed the gap with sabermetrics. That's
a system for mining baseball stats to find undervalued players while avoiding
long contracts for aging stars -- such as pitcher Pedro Martinez -- whose
performance is likely to decline. Henry built baseball's most effective team
but won't settle for one championship. After ending an 86-year drought, he's
aiming for a dynasty.” We’ll be watching.
What version of sabremetrics
do you use to compete effectively? How do you set the stage for victory? What
muscle building are you doing to create a dynasty for your organization?
Follow-up
Here are
selected updates on stories covered in prior issues of Executive
Times:
Ø
We
noted in the May 2004
issue of Executive Times that
shareholders were continuing to call for the ouster of DaimlerChrysler CEO Jürgen E. Schrempp. For a great update on how Schrempp has survived, be sure to read the article in the
December 27 issue of Fortune
titled, “The Nine Lives of Jürgen Schrempp” (http://www.fortune.com/fortune/subs/article/0,15114,1011595,00.html).
“Just a few months ago time seemed to be running out for Jürgen
Schrempp. Investors were screaming for the
DaimlerChrysler chairman's scalp because he had destroyed $60 billion in
stock market value in six years. His own management board had humiliated him
by vetoing part of his Asian strategy. … But a funny thing happened on the
way to the funeral: Schrempp survived. … and three of its four major operating divisions are
running well. Investors have responded by bidding up the price of the stock
nearly 10% in recent weeks. And for now, at least, Schrempp's
critics have quit yapping.” Read the article to find out why, and conclude
whether Schrempp will survive 2005.
Legacy
Information
The executive whose
legacy we call to your attention in this issue realized that the basis for wealth
had evolved from land to labor to information and once said, “Information
about money has become almost as important as money itself.” That remark is
inscribed in the lobby of New York's
Library of Science, Industry, and
Business. While leading Citigroup’s
rapid growth from 1967 to 1984 as CEO, Walter
B. Wriston turned information into action and
dramatic change for all financial services companies. He saw the potential
for automatic teller machines, and spent a fortune to put them everywhere and
supported them with improved and expensive internal computer systems based on
digital technology. He realized the impact of consumer credit on banking, and
flooded the market with credit cards. He extended the company’s reach
globally, doubling the size of the company during his tenure as CEO,
transforming the company into an international bank. Wriston
attacked regulatory constraints on banking and directly or indirectly broke
those restraints and transformed banking. All of us received a glimpse of his
lucid thinking in two books he wrote in retirement: Risk and
Other Four Letter Words (1986) and In the
Twilight of Sovereignty: How the Information Revolution Is Transforming Our
World (1992). Wriston’s premise in the latter
book is that information frees us and has become a force that can’t be
stopped. He wasn’t afraid of credit losses, and set profitable growth as the
most important measure of success. Wriston’s growth
bets continue to pay off for Citigroup decades after his retirement. Walt Wriston died on January 19 at age 85.
Wriston received the Presidential Medal of
Freedom in 2004, and his legacy continues in the Wriston
lectures, given annually at the Manhattan
Institute. You can read past lectures at http://www.manhattan-institute.org/html/wriston.htm.
For more about his life, read Philip Zweig’s
comprehensive (950 page) 1996 biography, Wriston: Walter Wriston,
Citibank, and the Rise and Fall of American Financial Supremacy. Wriston claimed that he never read the biography, saying,
“I'm too busy to read it. That's the past. I'm interested in the future.” In
1999 Fortune asked him why small
tech companies interested him, and he answered, “Well, if I'm not awfully
careful, I learn something.” We can all learn from Walt Wriston.
Latest
Books Read and Reviewed:
(Note: readers of the web version of Executive Times
can click on the book covers to order copies directly from amazon.com. When you order through these links, Hopkins
& Company receives a small payment from amazon.com. Click on the title to read the review or
visit our 2005 bookshelf at http://www.hopkinsandcompany.com/2005books.html).
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Title (Link to
Review)
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Author
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Rating
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Review Summary
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Purchase
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Harbor
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Adams, Lorraine
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•••
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Alien. Debut novel
explores Arab Muslim immigrants struggling in Boston,
Brooklyn and Montreal.
Fine portrayal of cultural confusion, terror and predators.
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Human
Capital
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Amidon, Stephen
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•••
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Short. Striving suburban Connecticut life
creates prosperity for all those around protagonist Drew Hagel, while he faces sequential failures.
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The
Corporation
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Bakan, Joel
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••
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Personification. Canadian
law professor explains that society has given too much control to
corporations and bad behavior should be expected unless new laws reign in
corporate greed.
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Eating
Mammals
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Barlow,
John
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••
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Hunger. If you can
stomach the macabre, and hunger to read something odd and unusual, these
three novellas will whet your appetite.
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Critical
Condition
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Bartlett,
Donald L. and James B. Steele
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•••
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Sick. Investigative
journalists tell scores of stories of how the health care system fails
Americans, and present some ideas on changes to get us out of this mess.
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Hannah
Coulter
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Berry,
Wendell
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••••
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Living. Poetic writing
and inspirational testament to living narrated by a woman who has welcomed
the love and losses of life fully. Could be Berry’s best novel.
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State
of Fear
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Crichton,
Michael
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••
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Manipulation. Fiction
with footnotes in which scientists manipulate data to further personal
interests, and Crichton notes how fears of global warming are misplaced
according to scientific data.
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Hard,
Hard City
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Fusilli, Jim
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•••
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Solid. Private eye Terry
Orr returns and endangers himself while helping restore the life of a
wayward teen. Character novel makes values plain and clear.
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The
Last Juror
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Grisham,
John
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••
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Character. Often tedious
novel of rural Southern life in the 1970s, long on local color, and short
on the real story of racism and power.
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Puppetmaster: The Secret Life of J. Edgar Hoover
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Hack,
Richard
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•••
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Excesses. More sad than sensational,
this life of Hoover
highlights all the demons he fought, and the life of fear he created and
led.
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21: The Final
Unfinished Voyage of Jack Aubrey
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O’Brian,
Patrick
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•
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Fragment. Handwritten
manuscript with some typed edits by the author placed in printed version.
Unsatisfying because incomplete, and appeals only to O’Brian addicts.
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The
Egyptologist
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Phillips,
Arthur
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•••
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Obsession. Engaging
creativity and complexity will keep intelligent readers interested as
multiple narrators present unusual happenings
among the tombs of the pharaohs.
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Bad Dirt:
Wyoming Stories 2
|
Proulx, Annie
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•••
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Cowboys. Author’s past
confusing poetic drabble replaced with clear prose in presenting rural
cowboy life with humor and poignancy.
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Wolves
Eat Dogs
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Smith,
Martin Cruz
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•••
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Patience. Arkady Renko returns for the
fifth installment in this series. Russia and Arkady
continue to change, both are struggling, but with patience Arkady figures things out.
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When
Fish Fly
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Yokoyama,
John
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••••
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School. Inspirational
story of the transformation of the author’s retail fish business, using
solid psychological principles, and creating a vision and a culture that
can be emulated to produce remarkable success.
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